Jonathan Canger, Ph.D.
TMP Worldwide/Monster
HUGO Assessment Group
The USF HR ROI Conference
January 17, 2003
Tampa, FL

 The Big Picture
 Model – The Roles of H R
 Person-Organization Fit
 Processes for Selecting For Fit
 Where Does Selecting For Fit Fit?
 Estimates Of ROI Vs. Reality
 What Else?

The Big Picture (Pfeffer, 1994)
 In 1972, How Would You Predict
The 5 US Companies
With The Largest 20-Year Return?
 (1972-1992)

The Big Picture (Pfeiffer, 1994)
Conventional Wisdom Says:
(a la Michael Porter, Competitive Advantage)
1.
•
•
•
•
•
Pick The Right Industries
Barriers To Entry
Substitute Products/Services
Power of Suppliers
Power of Buyers
Rivalry Amongst Existing Players
2. Pick Companies With Dominant Market Share

And The Winners Were….
1.
2.
3.
4.
5.
Southwest Airlines (21,000%)
Wal-Mart (19,800%)
Tyson Foods (18,100%)
Circuit City (16,400%)
Plenum Publishing (15,700%)
None of Which Would Have Made Porter’s List

“
The point here is not to throw out conventional strategic analysis … but simply to note that the source of competitive advantage has always shifted over time.
What these five firms have in common is that for their sustained advantage, they rely not on technology, patents, or strategic position, but on how they manage their workforce .
Jeffrey Pfeffer, Competitive Advantage Through
People, Harvard Business School Press, 1994

Future/Strategic Focus
Day-To-Day/Operational Focus

Future/Strategic Focus
Process
Day-To-Day/Operational Focus
People

Future/Strategic Focus
Process
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
Day-To-Day/Operational Focus
People

Future/Strategic Focus
Process
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
Day-To-Day/Operational Focus
People
2. “Employee Champion”
Managing Employees’
Contribution

Future/Strategic Focus
3. “Change Agent”
Managing
Transformation And
Change
Process
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
Day-To-Day/Operational Focus
People
2. “Employee Champion”
Managing Employees’
Contribution

Future/Strategic Focus
4. “Strategic Partner”
Aligning HR and
Business Strategy
Process
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
3. “Change Agent”
Managing
Transformation And
Change
People
2. “Employee Champion”
Managing Employees’
Contribution
Day-To-Day/Operational Focus

•
•
•
•
•
Where are you expected to focus?
Where can you do the best job?
What does the organization need?
Where can you have the biggest impact?
What’s your history with the roles?

Sample Results – HR Roles Survey
Highest Rated Items
(3.7 or Above)
•
•
•
WHAT HR IS DOING
HR participates in delivering HR processes (3.89)
HR spends much of its time listening and responding to employees’ issues (3.89)
HR helps this organization take care of employees’ personal needs (3.70)
•
•
•
•
HR SHOULD BE MEASURED BY its ability to efficiently deliver HR processes (4.3) its ability to help the organization anticipate and adapt to future issues (4.22) its ability to help meet employee needs (4.03) its ability to help make strategy happen (3.84)

Sample Results – HR Roles Survey
Lowest Rated Items
(Below 3.1)






WHAT HR IS( NOT) DOING
HR spends much of its time on strategic and business issues (2.69)
HR participates in the process of defining this organization’s business strategies (2.70)
HR is seen as a change agent (2.73)
HR help this organization improve operating efficiency (2.95)
HR helps this organization adapt to change (3.03)
HR spends much of its time supporting new behaviors to keep the organization competitive (3.03)

4. “Strategic Partner”
Aligning HR and
Business Strategy
Process
Future/Strategic Focus
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
Is
SB
3. “Change Agent”
Managing
Transformation And
Change
People
2. “Employee Champion”
Managing Employees’
Contribution
Day-To-Day/Operational Focus

•
•
•
• Sets The Upper Limit On Organizational
Performance
Can’t Develop Everyone For Everything
Turnover Is A Certainty
War For Talent Will Rise Again

 Traditionally, organizations have selected employees based on applicants’ KSAs and job requirements.
 This has led to a focus on:
– Cognitive ability
– Specific knowledge and skills relevant for a particular job

 In addition to predicting performance in a specific job, new goals include predicting:
– Satisfaction (Judge et al. 2001 meta-analysis: r between job satisfaction and job performance is
.30; 52 for complex jobs!)
– Tenure
–
–
–
Contextual / Citizenship performance
Effectiveness in teams
Effectiveness in diverse jobs

 Definition: Person-Organization (P-O) fit is the congruence of an individual’s personality, beliefs, and values with the culture, norms, and values of an organization

 Jennifer Chatman (1991) showed that assessing the congruence between a candidate’s values and the prevailing values of the organization predicted:
– Job satisfaction 1 year later
– Intent to stay with organization 1 year later
– Actual turnover 2.5 years later

PO Fit Involves the ‘Soft Underbelly’
“ Could Do ” “ Can Do ”
Knowledge
& Abilities
Experience
& Skills
“ Tends To ”
Personality
& Work Style
Preferences
& Values
“ Prefers To ”

•
•
Successful Person Profiling – Find candidates who are similar to the people who fit well in the organization now, in terms of their personality and values
Organization Culture Profiling – Assess the current culture or prevailing values and find candidates who would like that environment.

Example1 – Personality Profiling --Candidate vs. Successful, ‘Good Fit’ Incumbent
Emotional Stability
.
Extraversion
Openness
Agreeableness
Conscientiousness

Example2 – Candidate Organization Preferences vs.
“As Is” Organization
.
& Abilities
Experience
& Skills
Personality
& Work Style
Preferences
& Values
Candidate
Knowledge
& Ability
Requirements
Experience
& Skill
Requirements
Behavioral &
Work Style
Requirements
Organization
Practices
& Values
Organization

Example2 – Candidate Organization Preferences
Vs. “As Is” Organization
Newcomer Integration
Continuous Learning
Information Exchange
Casual Atmosphere
Profit Orientation
Individ. Expressiveness

Future/Strategic Focus
4. “Strategic Partner”
Aligning HR and
Business Strategy
Process
3. “Change Agent”
Managing
Transformation And
Change
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
2. “Employee Champion”
Managing Employees’
Contribution
Day-To-Day/Operational Focus
People

Future/Strategic Focus
4. “Strategic Partner”
Aligning HR and
Business Strategy
Process
1. “Administrative
Expert”
Managing The
Firm’s HR Infrastructure
3. “Change Agent”
Managing
Transformation And
Change
People
2. “Employee Champion”
Managing Employees’
Contribution
Day-To-Day/Operational Focus

•
•
•
Been Around For A While (Taylor-Russell
Tables - 1930s)
Tables Already Built That Predict The
Average Increase In Performance Expected,
Per Cent Increase in Satisfactory or Superior
Workers, etc.
Also Have Formulas To Predict Dollar Utility of Selection Procedures (Brogden, 1948;
Cronbach-Glesser, 1965)

Effect Of Validity
On % Satisfactory Workers
Per Cent Satisfactory with No Test
Per Cent Satisfactory
Employees
(50% Hired)
No Test 50%
Per Cent
Improvement in
Satisfactory EE’s
0
Test with r =.3
60% 20
Test with r =.6
Test with r =.8
70%
80%
40
60

Effect Of Quality of Candidates
On Test Impact
Per Cent Satisfactory with No Test
(50% Hired)
Per Cent Satisfactory
Employees When
Test with r =.5 used
10 17
Per Cent
Improvement in
Satisfactory EE’s
70
30
50
70
90
100
44
67
84
97
100
46.7
34
20
7.8
0

Effect Of Per Cent Of Candidates
Hired (Selection Ratio)
Selection Ratio
100%
80%
50%
20%
Per Cent Satisfactory
Employees When
Test with r =.5 used
50
Per Cent
Improvement in
Satisfactory EE’s
0
57
67
78
14
34
56

•
•
•
•
•
Not Familiar With The Models
Need To Collect Data
Complexity (Formulas / Number of Variables)
Frequently Yield Unrealistic Results
Managers Aren’t Swayed By Them

2.
3.
4.
5.
1.
Keep The HR Roles Model In Mind; Try To Impact
As Many Quadrants As You Can; Prioritize
Use Technology To Enhance Your Below-The-Line
Quadrants (or consider outsourcing)
Use Multiple Metrics, and Involve Decision Makers
In The Design Of Any Metrics (Execs, Finance, Ee’s)
Align With Company Strategy And Objectives And
Look At Larger, Organization Wide Outcome
Performance Data, even If ‘Contaminated’
Use Concurrent Validation Studies – “If we implement this procedure, we’d have 10 more Marys and 10 less Bobs”

6.
7.
Consider ‘Fit’ Initiative – Become an Employer of
Choice for The People That Fit, not for everyone.
Learn The Business and What Competitors are doing, and tell Management
8.
9.
Distribute The Watson-Wyatt Study, along with your summary, to your executives
Build Your Own Version of Watson-Wyatt Study –
What predicts Tenure & commitment in Your
Organization? – and combine with EOS
10.
Partner With Finance, but Learn From Sales &
Marketing

Jonathan Canger, Ph.D.
TMP Worldwide/Monster
HUGO Assessment Group
The USF HR ROI Conference
January 17, 2003
Tampa, FL